Administrative Law Case Digests

Arellano University School of Law

aiza ebina/2015

PADUA vs RANADA
390 SCRA 663
Status and Characteristics
Consequence of Characteristics of Administrative Agencies
FACTS: On November 9, 2001, the TRB issued Resolution No. 2001-89 authorizing provisional toll rate adjustments
at the Metro Manila Skyway, effective January 1, 2002. For implementation starting January 1, 2002 after its
publication once a week for three (3) consecutive weeks in a newspaper of general circulation and that said
Provisional Toll Rate Increase shall remain in effect until such time that the TRB Board has determined otherwise.
On December 17, 24 and 31, 2001, the above Resolution approving provisional toll rate adjustments was published
in the newspapers of general circulation.
Tracing back the events that led to the issuance of the said Resolution, it appears that on February 27, 2001 the
Citra Metro Manila Tollways Corporation (CITRA) filed with the TRB an application for an interim adjustment of the
toll rates at the Metro Manila Skyway Project Stage 1. CITRA moored its petition on the provisions of the
Supplemental Toll Operation Agreement (STOA), authorizing it, as the investor, to apply for and if warranted, to be
granted an interim adjustment of toll rates in the event of a significant currency devaluation.
Claiming that the peso exchange rate to a U.S. dollar had devaluated from P26.1671 in 1995 to P48.00 in 2000,
CITRA alleged that there was a compelling need for the increase of the toll rates to meet the loan obligations of the
Project and the substantial increase in debt-service burden.
Due to heavy opposition, CITRAs petition remained unresolved. This prompted CITRA to file on October 9, 2001 an
Urgent Motion for Provisional Approval, this time, invoking Section 3, Rule 10 of the Rules of Practice and Procedure
Governing Hearing Before the Toll Regulatory Board (TRB Rules of Procedure).
On October 30, 2001, CITRA moved to withdraw its Urgent Motion for Provisional Approval without prejudice to its
right to seek or be granted provisional relief under the above-quoted provisions of the TRB Rules of Procedure,
obviously, referring to the power of the Board to act on its own initiative.
On November 7, 2001, CITRA wrote a letter to TRB expressing its concern over the undue delay in the proceeding,
stressing that any further setback would bring the Projects financial condition, as well as the Philippine banking
system, to a total collapse. CITRA recounted that out of the US$354 million funding from creditors, two-thirds (2/3)
thereof came from the Philippine banks and financial institutions, such as the Landbank of the Philippines and the
Government Service Insurance Services. Thus, CITRA requested TRB to find a timely solution to its predicament.
On November 9, 2001, TRB granted CITRAs motion to withdraw the Urgent Motion for Provisional Approval and, at
the same time, issued Resolution No. 2001-89, earlier quoted.
Hence, petitioners Ceferino Padua and Eduardo Zialcita assail before this Court the validity and legality of TRB
Resolution No. 2001-89.
Petitioner Ceferino Padua, as a toll payer, filed an Urgent Motion for a Temporary Restraining Order to Stop Arbitrary
Toll Fee Increases in a petition for mandamus earlier filed by him. In his urgent motion, petitioner Padua claims that
alone, TRB Executive Director Jaime S. Dumlao, Jr., could not authorize the provisional toll rate adjustments because
the TRB is a collegial body. On January 4, 2002, petitioner Padua filed a Supplemental Urgent Motion for a TRO
against Toll Fee Increases, arguing further that Resolution No. 2001-89 was issued without basis considering that
while it was signed by three (3) of the five members of the TRB, none of them actually attended the hearing.
Petitioner Eduardo Zialcita, as a taxpayer and as Congressman of Paranaque City, filed the present petition for
prohibition with prayer for a temporary restraining order and/or writ of preliminary injunction against TRB and
CITRA, impugning the same Resolution No. 2001-89. He asserts that the provisional toll rate adjustments are
exorbitant and that the TRB violated its own Charter, Presidential Decree No. 1112, when it promulgated Resolution
No. 2001-89 without the benefit of any public hearing. He also maintains that the TRB violated the Constitution
when it did not express clearly and distinctly the facts and the law on which Resolution No. 2001-89 was based. And
lastly, he claims that Section 3, Rule 10 of the TRB Rules of Procedure is not sanctioned by P.D. No. 1112.
ISSUE: Whether or not Resolution No. 2001-89 issued by the Toll Regulatory Board (TRB) is valid
RULING: Yes. The remedy of prohibition initiated by petitioner Zialcita suffers several infirmities. Initially, it violates
the twin doctrine of primary administrative jurisdiction and non-exhaustion of administrative remedies. P.D. No.
1112 explicitly provides that the decisions of the TRB on petitions for the increase of toll rate shall be appealable to
the Office of the President within ten (10) days from the promulgation thereof.
Obviously, the laws and the TRB Rules of Procedure have provided the remedies of an interested Expressways user.

The initial proper recourse is to file a petition for review of the adjusted toll rates with the TRB. The need for a prior
resort to this body is with reason. The TRB, as the agency assigned to supervise the collection of toll fees and the
operation of toll facilities, has the necessary expertise, training and skills to judiciously decide matters of this kind.
As may be gleaned from the petition, the main thrust of petitioner Zialcitas argument is that the provisional toll rate
adjustments are exorbitant, oppressive, onerous and unconscionable. This is obviously a question of fact requiring
knowledge of the formula used and the factors considered in determining the assailed rates. Definitely, this task is
within the province of the TRB.
We take cognizance of the wealth of jurisprudence on the doctrine of primary administrative jurisdiction and
exhaustion of administrative remedies. In this era of clogged court dockets, the need for specialized administrative
boards or commissions with the special knowledge, experience and capability to hear and determine promptly
disputes on technical matters or intricate questions of facts, subject to judicial review in case of grave abuse of
discretion, is indispensable. Between the power lodged in an administrative body and a court, the unmistakable
trend is to refer it to the former."
If the case is such that its determination requires the expertise, specialized skills and knowledge of the proper
administrative bodies because technical matters or intricate questions of facts are involved, then relief must first be
obtained in an administrative proceeding before a remedy will be supplied by the courts even though the matter is
within the proper jurisdiction of a court.
For another, it is not true that it was TRB Executive Director Dumlao, Jr. alone who issued Resolution No. 2001-89.
The Resolution itself contains the signature of the four TRB Directors, namely, Simeon A. Datumanong, Emmanuel P.
Bonoan, Ruben S. Reinoso, Jr. and Mario K. Espinosa. Petitioner Padua would argue that while these Directors signed
the Resolution, none of them personally attended the hearing. This argument is misplaced. Under our
jurisprudence, an administrative agency may employ other persons, such as a hearing officer, examiner or
investigator, to receive evidence, conduct hearing and make reports, on the basis of which the agency shall render
its decision. Such a procedure is a practical necessity.
At any rate, it cannot be gainsaid that the term administrative body or agency includes the subordinate officials
upon whose hand the body or agency delegates a portion of its authority. Included therein are the hearing officers
through whose eyes and ears the administrative body or agency observes the demeanor, conduct and attitude of
the witnesses and listens to their testimonies.
It must be emphasized that the appointment of competent officers to hear and receive evidence is commonly
resorted to by administrative bodies or agencies in the interest of an orderly and efficient disposition of
administrative cases.
Corollarily, in a catena of cases, this Court laid down the cardinal requirements of due process in administrative
proceedings, one of which is that the tribunal or body or any of its judges must act on its or his own independent
consideration of the law and facts of the controversy, and not simply accept the views of a subordinate. Thus, it is
logical to say that this mandate was rendered precisely to ensure that in cases where the hearing or reception of
evidence is assigned to a subordinate, the body or agency shall not merely rely on his recommendation but instead
shall personally weigh and assess the evidence which the said subordinate has gathered.
Be that as it may, we must stress that the TRB's authority to grant provisional toll rate adjustments does not require
the conduct of a hearing. Pertinent laws and jurisprudence support this conclusion.
RATIO: The very characteristics of administrative agencies necessitate that delegation of function and authority be
a predominant feature of their organization and procedure. At any rate, it cannot be gainsaid that the term
administrative body or agency includes the subordinate officials (hearing officers, examiners, investigators) upon
whose hand the body or agency delegates a portion of its authority.
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